financial statement analysis l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Financial Statement Analysis: PowerPoint Presentation
Download Presentation
Financial Statement Analysis:

Loading in 2 Seconds...

play fullscreen
1 / 159

Financial Statement Analysis: - PowerPoint PPT Presentation


  • 401 Views
  • Uploaded on

Financial Statement Analysis:. Understand and Interpret Financial Results for Better Management & Credit Decisions. Denver – March 30, 2004. Introduction and Understanding Specific Interests. Eric Edwards – Axiomate, Inc. Jeff Holben – E 2 Business Services, Inc.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Financial Statement Analysis:' - emily


Download Now An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
financial statement analysis

Financial Statement Analysis:

Understand and Interpret Financial Results for Better Management & Credit Decisions

Denver – March 30, 2004

Axiomate, Inc.

introduction and understanding specific interests
Introduction and Understanding Specific Interests
  • Eric Edwards – Axiomate, Inc.
  • Jeff Holben – E2 Business Services, Inc.
  • What Participants Hope to Get from Seminar

Axiomate, Inc.

purpose of class
Purpose of Class
  • Understand the basics of financial presentation
    • Understand where the numbers come from and what they mean.
    • Introduction to the “art of accounting” or the objective v. subjective
  • Understand the basics of financial instruments
  • Understand the basics of deal evaluation

Axiomate, Inc.

our day
Our Day
  • Walkthrough the Financial Statements
  • Discuss each major line item:
    • What the number means
    • Source of the number
      • Evidentiary matter behind the number
    • Hard side of number
      • The extent to which the number is OBJECTIVE
    • Soft side of number
      • The extent to which the number is SUBJECTIVE
    • The One Sided Entry
      • For every action (Dr.) there is an equal and opposite reaction (Cr.)
  • Look at footnotes
  • Walk through the S-1
  • Turn you lose on the numbers, maybe

Axiomate, Inc.

what type of org structure
What Type of Org. Structure
  • Number of Owners/Shareholders
  • Taxes
  • Liability
  • Cost of Operations
  • Financing

Axiomate, Inc.

purpose of financial statements
Purpose of Financial Statements
  • Used by:
    • Equity Shareholders
    • Banks and Financial Creditors
    • Customers and Suppliers
    • Potential Investors
    • Management and Board

Relied upon in gaining comfort from risk

Axiomate, Inc.

purpose of financial statements8
Purpose of Financial Statements
  • Equity Shareholders
    • Monitoring Investment & Management
  • Banks and Financial Creditors
    • Analyzing Risk For Credit Decisions
  • Customers and Suppliers
    • Analyzing Risk For Credit Decisions
  • Potential Investors
    • Analyzing Risk for Investment Decision
  • Management and Board
    • Business Management / Oversight

Axiomate, Inc.

purpose
Purpose ---
  • Comfort from Risk
    • Credit Risk
    • Investment Risk
    • Management Risk
    • Employment Risk
    • Purchase Risk

Axiomate, Inc.

purpose of financial statements10
Purpose of Financial Statements

Offense– Statement preparers

Vs

Defense – Statement Users

(& Auditors)

Axiomate, Inc.

example companies
Example Companies
  • Netflix, Inc. (Simpler)
    • Symbol: NFLX (NASDAQ)
    • Total Revenues of $150 million
    • Rapidly growing, entrepreneurial company
  • Aspen Technology, Inc. (Complex)
    • Symbol: AZPN (NASDAQ)
    • Total Revenues of $320 million
    • Complex, struggling company
    • Core Financial Statements do not tell the whole story

Axiomate, Inc.

guest company netflix
Guest Company - NetFlix

Netflix (Nasdaq: NFLX) is the world's largest online DVD movie rental service offering more than one million members access to more than 15,000 titles.

Netflix’s appeal and success are built on providing the most expansive selection of DVDs, an easy way to choose movies and fast, free delivery.

Axiomate, Inc.

elements of a complete financial package
Elements of A Complete Financial Package
  • Auditors Opinion
  • Balance Sheet
  • Income Statement
  • Statement of Cash Flows
  • Statement of Equity
  • Footnotes
  • Other SEC Disclosures for Public Companies

Axiomate, Inc.

types of statements accountant opinions
Types of Statements – Accountant Opinions
  • Audit
    • Statements are a fair presentment in accordance with GAAP
  • Review
    • Statements presented in GAAP, appear fair.
  • Compilation
    • Statements have been organized

Axiomate, Inc.

understanding the auditor s opinion the defense
Understanding The Auditor’s Opinion (the Defense?)
  • Only the Opinion Page Belongs to the Auditors (not our job to prepare statements)
  • Our work is sufficient to have REASONABLE assurance statements are free of MATERIAL misstatement
  • The Statements prepared on consistent basis and Present FAIRLY the financial condition
  • Qualified vs.. Unqualified

Axiomate, Inc.

auditor s opinion qualified
Auditor’s Opinion - Qualified

Qualification

Axiomate, Inc.

auditors who do they play for
Auditors – who do they play for?
  • Auditors were established as somewhat of a private sector police force to uphold accounting integrity.
    • Securities Act of 1933/34
  • Auditors perform the “ATTEST” function
    • They assume responsibility for fairness & dependability
  • Yet, auditors are hired by and paid for by the Company
    • Audit committee (Mgmt Control vs.. Independent)
  • Through 2000, consulting fees were lucrative

Axiomate, Inc.

understanding company s motivates the offense
Understanding Company’s Motivates (the Offense)
  • Financial statements and footnotes belong to the company.
  • Management uses financial statements to tell a story – the way they want to story to be told.
  • Story may be designed for a specific audience.
    • Consider who the audience might be when reading statements
  • Financial statement presentation is NOT black & white.

Axiomate, Inc.

dissecting the balance sheet

Dissecting The Balance Sheet

ASSETS

Axiomate, Inc.

fundamentals of accounting
Fundamentals of Accounting

For every debit, there must be an equal and corresponding credit(s)

Axiomate, Inc.

the balance sheet

Liquidity

Current Assets

Current Liabilities

The Balance Sheet

Long-Term Liabilities

Fixed Assets

Equity Section

Other Assets

Axiomate, Inc.

the balance sheet current assets

The Balance Sheet – Current Assets

Also: A/R & Inv

Axiomate, Inc.

dissecting the balance sheet left side thinking current assets
Dissecting the Balance Sheet – Left Side Thinking – Current Assets

Current Assets

Axiomate, Inc.

dissecting the balance sheet left side thinking current assets25
Dissecting the Balance Sheet – Left Side Thinking – Current Assets

Current Assets

Axiomate, Inc.

dissecting the balance sheet left side thinking other assets
Dissecting the Balance Sheet – Left Side Thinking – Other Assets
  • Deposits
  • Long-term receivables
  • Deferred Tax benefits
  • Long-term prepaids

Axiomate, Inc.

dissecting the balance sheet35

Dissecting The Balance Sheet

LIABILITIES

Axiomate, Inc.

dissecting the balance sheet right side thinking long term liabilities
Dissecting the Balance Sheet – Right Side Thinking Long-Term Liabilities

Axiomate, Inc.

dissecting the balance sheet right side thinking long term liabilities41
Dissecting the Balance Sheet – Right Side Thinking Long-Term Liabilities

Axiomate, Inc.

dissecting the balance sheet42

Dissecting The Balance Sheet

EQUITY /

NET WORTH

Axiomate, Inc.

netflix equity

Netflix – Equity

Axiomate, Inc.

dissecting the balance sheet other good metrics
Dissecting the Balance Sheet – Other Good Metrics
  • Inventory Turnover:
    • Cost of Goods/Inventory
    • Inventory turnover days: 365/Inventory Turnover
  • A/R Turnover
    • Sales/Accounts Receivable
    • A/R turnover days: 365 / AR Turnover
  • Cash Cycle
    • Add Inventory and A/R days
    • Number of days from product to cash

Axiomate, Inc.

income statement revenue transition

Income Statement – Revenue - Transition

Growth

No Growth

Axiomate, Inc.

dissecting the income statement revenue
Dissecting the Income Statement - Revenue
  • Types of Revenues
    • Goods Sold (Sales)
    • Fees
    • Subscriptions
    • Rents
    • Software Licenses
    • Maintenance
  • Gross vs.. Net
  • Project Revenues / Progress Billing
  • When to Recognize / Record

Axiomate, Inc.

dissecting the income statement cost of goods55
Dissecting the Income Statement – Cost of Goods
  • Direct Cost of Revenue
  • Cost of Sales vs.. Operating Expenses
  • Should Cost of Sales all be variable?
  • Allocation of Fixed Expenses to departments/categories

Axiomate, Inc.

dissecting the income statement operating expenses
Dissecting the Income Statement – Operating Expenses
  • Types of Expenses – Allocation Discretion
  • Sales and Marketing
    • Advertising, Sales salaries/commissions, T&E
  • Research & Development
    • Development Salaries
  • General & Administrative
    • Rent, Supplies, Utilities
  • Other Operating Expenses / Non-recurring / Special
  • Cash vs.. Non-Cash
  • Capitalized Expenses / Amortization

Axiomate, Inc.

dissecting the income statement below the line
Dissecting the Income Statement – Below the Line
  • Interest & Investment Income / (Expense)
  • Extraordinary Items
  • Minority Interest
  • New Reconciliations

Axiomate, Inc.

dissecting the income statement important metrics terms
Dissecting the Income Statement – Important Metrics & Terms
  • Gross Margin / Contribution Margin
  • Operating Margin / Return of Sales
  • Industry Specific Measures
    • Sales & Marketing / Revenues
    • R&D / Revenues
    • G&A / Revenues
  • EBITDA

Axiomate, Inc.

taking a bath
Taking a Bath
  • What companies / CFO’s will do in bad years
    • Positioning to manage earnings in good years
    • Sometimes, they will “profit” from the bathwater
    • Many washed up in 2001/02

Axiomate, Inc.

what is cash
What is Cash?
  • Cash is the money that a person actually has, including money on deposit (Webster's)
  • Cash is the medium of exchange (Economics)
  • Cash is king (am. slang)

Axiomate, Inc.

cash is

Cash is……

The lifeblood of a business. It nourishes all of the arms of an organization. It keeps it alive!

(Revenue, is the heart in this body. It is revenue that must continually pump the cash into and through the system.)

Axiomate, Inc.

cash consists of
Cash consists of
  • Money on hand (petty cash or cash in the vault)
  • Cash in the bank
    • Deposits in transit (but not O/S checks)
  • Cash equivalents
    • Time deposits
    • Repos
    • Other

Axiomate, Inc.

cash does not consist of
Cash does not consist of:
  • Short-term Investments
    • Near enough to cash (see footnotes)
  • Long-term Investments
  • Accounts Receivable
  • Deposits

Axiomate, Inc.

what is cash flow
What is cash flow?
  • Cash that is generated by a business
    • Generally customers
  • Vs. that is demanded by the business:
    • including its shareholders,
    • financiers
    • and vendors
  • in its normal course.

Axiomate, Inc.

cash comes from
Cash comes from:
  • Operations or Operating Activities
    • Sales, usually via accounts receivable (see sources and uses.)
  • Investing Activities
    • Sale of part of the business
    • Sale of assets (including factoring)
  • Financing Activities
    • Investors (sale of stock)
    • Banks (Loans)

Axiomate, Inc.

cash v cash flow and income
Cash v. Cash Flow and Income
  • I made money, but I feel so broke
    • Timing differences between net income and cash
      • Receivables vs.. payables
      • Deferred expenses vs.. revenues
      • Capital expenditures and amortization
      • Growth financing
  • You say I lost money, ha! I have plenty of cash
      • For now! There is often a lag between accrual income and cash flow

Axiomate, Inc.

understanding sources uses
Understanding Sources & Uses

Revenue

  • A straight sale for cash is a source of cash
  • However when the sale becomes a receivable, we have a use of cash. We, in essence, let our customer use our cash.
  • The payment of a receivable by the customer is a source of cash.

Axiomate, Inc.

understanding sources uses73
Understanding Sources & Uses

Expense

  • A straight purchase from a vendor * is a use of cash.
  • However when that purchase is on account (they will bill and we will pay later) this becomes a source of cash.
  • When we later pay the bill, it is a use of cash.

Axiomate, Inc.

the cash flow statement
The Cash Flow Statement
  • Largely a “different look” than other financial statements
    • Operations
    • Financing Activities
    • Investing Activities
  • Only a few items of ‘new information’
      • Depreciation / Amortization
      • Acquisitions and deletions of fixed assets
      • Investment in company / Business Acquisitions
  • Cash Flow explains changes in cash position as a calculation of other changes
    • It is mechanical

Axiomate, Inc.

netflix balance sheet

Netflix Balance Sheet

Change of Cash: $43,683

Axiomate, Inc.

netflix cash flow

Operations

Netflix Cash Flow

Investing

Financing

Change in Cash

Change in Cash

Supplemental

Axiomate, Inc.

netflix cash flow77

Netflix Cash Flow

Change in Cash

Change in Cash

Axiomate, Inc.

cash flow from operations

Operations

Cash Flow from Operations

Lost Money /

Positive Cash Flow

Axiomate, Inc.

cash flow from investing

Cash Flow from Investing

Misleading

Investing

Axiomate, Inc.

cash flow from financing

Cash Flow from Financing

Investing

Sold some Stock

Axiomate, Inc.

cash flow supplemental disclosures

Cash Flow – Supplemental Disclosures

Stock for Stock & Stock for Services

Supplemental

Axiomate, Inc.

netflix cash flow cont

Operations

Netflix Cash Flow (cont)

Investing

Financing

Change in Cash

Change in Cash

Supplemental

Axiomate, Inc.

what is e b i t d a
What is E.B.I.T.D.A.
  • Earnings Before
    • Interest
    • Taxes
    • Depreciation
    • Amortization
  • It is a crude measure of cash flow
  • What it is NOT: true cash flow

Axiomate, Inc.

calculating ebitda
Calculating EBITDA

Step 1 – Begin with Income Statement

Axiomate, Inc.

calculating ebitda93
Calculating EBITDA

Step 2 – Deduct Interest, Taxes…

Axiomate, Inc.

calculating ebitda94
Calculating EBITDA

Step 2 – ….. Depreciation and Amortization…

Axiomate, Inc.

how good is ebitda as a measure of cash flow96
How Good is EBITDA as a Measure of Cash Flow?

What about the other “non-cash” items?

Axiomate, Inc.

revised look at ebitda98
Revised Look at EBITDA

Change in WC

$4782

Axiomate, Inc.

ebitda vs cash flow
EBITDA vs.. Cash Flow
  • 2002 EBITDA – $14.5M vs.. change of cash of $.7M and cash flow from ops of $40M
  • EBITDA is crude
    • Depreciation is, long term, a real number
      • Assets have to be replaced
    • Taxes and interest are real uses of cash
    • Real cash is affected by changes in balance sheet
      • Particularly working capital
  • Cash Flow is crude
    • It is a mechanical explanation of the change in cash position

Axiomate, Inc.

understanding your unique cash flow
Understanding your Unique Cash Flow
  • YOU MUST UNDERSTAND
    • Days Sales
      • How long does it take a receivable to turn to cash
    • Payables
      • What is average days payable
      • What must you pay currently, 30 days, what gets stretched
    • To what extent does your business have “deferrals”

Axiomate, Inc.

managing float the holes of cash inflow
Managing Float – (the Holes of Cash Inflow)
  • Invoicing Float
    • Time goods / services are delivered to time invoiced
      • Particular issue with professional services firm
  • Mail Float
    • Time it takes for invoice to get to customer
    • Time it takes for “check to be in the mail.”
  • Customer Processing Float
    • Time it takes for customer to receive, code, approve and pay invoice
  • Company Processing Float
    • Time it takes to get the check from the mail, posted and to the bank
  • Bank Processing Float
    • Time it takes from deposit to available funds
    • Time it takes from available funds to a cleared check

Axiomate, Inc.

read the footnotes
Read the Footnotes

“The financial statements are a snapshot. The footnotes ARE the story.”

Axiomate, Inc.

dissecting the footnotes
Dissecting the Footnotes
  • The real substance of the financial statements
    • Accounting policies
    • Debt terms and debt service
    • Commitments and contingencies (litigation)
    • Off balance sheet financing (leases)
    • Unusual transactions and relationships
      • Related parties
      • Segment reporting
    • Equity division and shareholder rights
    • Employee benefit plans
    • Subsequent events
  • Read Carefully!

Axiomate, Inc.

footnote 1 accounting policies cont
Footnote 1 – Accounting Policies (cont)

Accounting

Change

Axiomate, Inc.

footnote 1 accounting policies cont impact of accounting rule changes
Footnote 1 – Accounting Policies (cont)Impact of Accounting Rule Changes

Axiomate, Inc.

footnote 2 property equipment
Footnote 2 – Property & Equipment

Sometimes called PP&E

Axiomate, Inc.

footnote 3 aspen acquisitions119
Footnote 3 Aspen – Acquisitions

What IF?

Axiomate, Inc.

footnote 7 shareholder equity
Footnote 7 – Shareholder Equity
  • Description of Shares
    • Number of shares authorized and issued
    • Voting rights
    • Conversion rights
    • Redemption and liquidation rights
  • Stock options
    • Size and basic terms of plan.
    • Shares granted, exercised and forfeited by year
    • Minimum and maximum exercise prices. Weighted average of exercise prices
    • Value of options (Black-Scholes)
  • Often a separate footnote for 1) common stock; 2) preferred stock and 3) options

Axiomate, Inc.

footnote 8 income taxes
Footnote 8 – Income Taxes

Reconciles Books to Taxes

Valuation Allowance

NOL

Axiomate, Inc.

footnote 9 aspen segment reporting cont
Footnote 9 (Aspen) – Segment Reporting (cont.)

Product/Service Lines (also Markets?)

Geographic

Axiomate, Inc.

the 10k

The 10K

Axiomate, Inc.

part i the business
Part I – The Business

Forward-Looking Statements

This annual report contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include statements regarding: our plans to open additional distribution centers in 2003; marketing expenses; technology and development expense; future stock-based compensation expense; our short-term investment strategy; international expansion; the ability of our recommendation service to accurately predict subscriber preferences; and customer acquisition and retention. These forward-looking statements are subject to risks and uncertainties described under the caption “Risks Related to Our Business” which could cause actual results to materially differ.

Axiomate, Inc.

dissecting the annual reports 10k and narratives
Dissecting the Annual Reports, 10K, and Narratives
  • The Business (general sub-topics):
    • The Business
    • Industry Background
    • Company Advantage
    • Strategy
    • Products & Services
    • Strategic Partnerships
    • Customers
    • Sales and Marketing
    • Competition
    • Intellectual Property (IP)
    • Employees

Axiomate, Inc.

risk factors
Risk Factors

Factors that May Affect future Results of Operations

“If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. In that case, the trading price of our common stock could decline, and you could lose all or part of your investment.”

Axiomate, Inc.

risk factors business
Risk Factors - Business
  • “We have a limited operating history and history of net losses, and we may experience net losses in the future.”
  • “If we are unable to effectively utilize our recommendation service, our business may suffer.”
  • “If we are not able to manage our growth, our business could be affected adversely.”
  • “We depend on studios to release titles on DVD for an exclusive time period following theatrical release.”’
  • “We may need additional capital, and we cannot be sure that additional financing will be available.”

Axiomate, Inc.

risk factors business red letter ed
Risk Factors – Business – Red Letter Ed.
  • “Increases in the cost of delivering DVDs could adversely affect our gross profit and marketing expenses.”
  • “We depend on studios to release titles on DVD for an exclusive time period following theatrical release.”
  • “If disposable DVDs are adopted and supported as a method of content delivery by the studios, our business could be adversely affected.”
  • “If we are unable to offset increased demand for titles with increased subscriber retention or operating margins, our operating results may be affected adversely.”
  • “If we are unable to renegotiate our revenue sharing agreements when they expire on terms favorable to us, or if the cost to us of purchasing titles on a wholesale basis increases, our gross margins may be affected adversely.”

Axiomate, Inc.

risk factors business not quite comical
Risk Factors – Business – Not quite comical
  • “If we experience delivery problems or if our subscribers or potential subscribers lose confidence in the U.S. mail system, we could lose subscribers, which could adversely affect our operating results.”
  • “If we are unable to compete effectively, our business will be affected adversely.”
  • “Our reputation and relationships with subscribers would be harmed if our billing data were to be accessed by unauthorized persons.”
  • “If consumer adoption of DVD players slows, our business could be adversely affected.”
  • “Our executive offices and San Jose-based shipping center are located in the San Francisco Bay area. In the event of an earthquake, other natural or man-made disaster or power loss, our operations would be affected adversely.”
  • “The loss of one or more of our key personnel, or our failure to attract, assimilate and retain other highly qualified personnel in the future, could seriously harm our existing business and new service developments. “

Axiomate, Inc.

risk factors stock ownership
Risk Factors – Stock Ownership
  • “Our officers and directors and their affiliates will exercise significant control over Netflix.”
  • “Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.”
  • “Our stock price is volatile.”
  • “We will record substantial expenses related to our issuance of stock options that may have a material negative impact on our operating results for the foreseeable future.”
  • “Financial forecasting by us and financial analysts who may publish estimates of our financial results will be difficult because of our limited operating history, and our actual results may differ from forecasts.” 

Axiomate, Inc.

md a understanding the business model144
MD&A – Understanding the Business Model

Cost of Revenue

Axiomate, Inc.

md a unique items
MD&A – Unique Items

“Strategic Incentives”

Axiomate, Inc.

md a unique items146
MD&A – Unique Items

Stock-based Compensation

Axiomate, Inc.

md a liquidity and capital resources
MD&A – Liquidity and Capital Resources

“In essence, verbal explanation of cash balance and cash flow”

Axiomate, Inc.

md a restructuring charges
MD&A – Restructuring Charges

“Another Risk Factor – This Management Team”

Axiomate, Inc.

signatures
Signatures

Nothing New

New

Axiomate, Inc.

exhibits
Exhibits

Axiomate, Inc.

signatures153
Signatures

Axiomate, Inc.

current trends
Current Trends
  • Sarbanes – Oxley
  • FASB / SEC Pressure
  • Shareholder Suits

Axiomate, Inc.

sarbanes oxley act of 2002
Sarbanes-Oxley Act of 2002
  • Reporting
    • Upgrade disclosures
  • Roles
    • Strengthen corporate governance
  • Conduct
    • Expand insider accountability
  • Enforcement
    • Increase Oversight
  • Penalties
    • Broaden Sanctions
  • Relationships
    • Re-establish auditor independence

Axiomate, Inc.

reporting
Reporting
  • Sec 404 – Evaluation of Internal Control
    • Management must annually self-assess I/C
  • Sec 302 – Management Certifications
    • Responsibility for disclosure controls
    • “evaluation of disclosure controls”
      • Disclosure to auditors of deficiencies
  • Sec 401 - Off Balance Sheet & Proforma Disclosures
    • Enhances disclosures of off balance sheet items
  • Sec 404 – Evaluation of Internal Control
    • Management must annually self-assess I/C
  • Sec 409 - Real Time Issuer Disclosures
    • Rapid and current disclosures of sudden changes

Axiomate, Inc.

understanding business processes
Understanding Business Processes
  • What events within the business have financial consequence?
    • Classify types of transacations
      • Production cycle; sales cycle; receipt cycle; disbursement cycle; finance cycle; capital cycle
    • Identify all types of transactions within a business
      • Routine v. non-routine;
      • Volume of transaction;
      • degree of judgment applied to valuation
      • Liquidity of underlying asset
    • Identify risks within process
      • What can go wrong?
      • Impact if it goes wrong?

Axiomate, Inc.

additional resources
Additional Resources
  • Analysis / Information Sites
    • Hoovers www.hoovers.com AICPA www.aicpa.org
    • Edgar www.sec.gov RMA www.rmahq.org
  • Books
    • Corporate Controllers Handbook of Financial Management
    • The Portable MBA in Finance and Accounting
    • Lorman Bookstore www.lorman.com

Axiomate, Inc.

thank you
Thank You!

Axiomate, Inc.